Consulting Value Enhancement Profit Improvement Management Consulting
The Transition Companies
The current economic downturn is due to three factors: 1) Too much cheap money for too long and a Federal Reserve that created the housing bubble, 2) The use of unstable financing provided to people who didn’t understand what they were getting, and 3) The rating agencies allowed poor quality high debt to pass into the system. The businesses relying on the housing market are in a slump that will not bottom out until the end of this year.
What can be done to counter this trend and to protect your current business and even make advances during this period?
There are four strategies that you can apply now to take advantage of the slow periods.
- Build on your core values. When your bottom line looks dismal the tendency is to reduce or cut spending and personnel. Yes, you want to cut the fat but DO NOT go after the brand building or innovation projects as these are your future.
The lean times are when the focus should be on the new products, service and innovations, that will propel you ahead. Invest this time in intensive self investigation asking employees for suggestions, ideas and ways to make you faster, leaner to become more creative. If wages need to be cut then include top management, so that everyone can suffer together. This builds loyalty. Use this time to look for the highly skilled unhappy employee that you have always wanted to get. He is most likely unhappy or fearful for his job at your competitor.
- Constantly communicate. You must constantly communicate your message and explain why it’s changing and why it will be better. Get information from both your customers, your people and your competition, and get it fast. Have weekly strategy meetings so as the information is updated you can adjust your strategies. Constantly update, verify and re-verify the information and then communicate it to the rest of your team. You must communicate your needs the needs of the company to your team and between teams. You are the cheerleader so you must facilitate the flow of information.
- Judge your customers. Identify your weak, high risk, slow paying customers. Business is business and so if you aren’t getting paid or paid on time cut off those who want to use you as a lender. These types can drag you down very quickly.
- Clean out the attic. Resist the notion to make wide sweeping general cuts. Identify the slow moving, less profitable products and cut those that drag your resources down. Invest and focus on the products or areas that provide the most return for the dollar. Increase these performers capacity to the top as they will always pay the way.
